Investment firms' plight is the investor's delight

Personal Finance
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I'M ENJOYING the increasing sense of desperation in the investment industry. When an oldie institution like Legal & General slashes PEP charges (see back page) something's up. Stock market investors have had a great run so far this year. The UK market is up more than 15 per cent, Wall Street and Hong Kong more than 20 per cent.

Normally such growth would be a signal for the small saver to dive in at these market highs and for investment managers to launch all sorts of exotic funds to pull them in. But they're not, and they can't. Savers aren't really buying, and investment companies are having to rein back some of their inbred optimism. Technology funds riding on the back of Internet- fever have been shelved due to lack of investor interest.

So instead the companies are having to try a new tack - cutting prices. As well as L&G, HSBC this week announced price cuts on its range of index- tracking unit trusts, which aim to match the performance of different stock markets. Cheaper PEPs and unit trusts aren't always better, of course. But they are if you were going to invest anyway. More to the point though, the price cuts are long overdue.

The danger, however, is that the Tessa money shortly to mature and the proposals for a new type of investment fund - oddly called an Oeic (open- ended investment company) - might distract the companies from this worthy activity. Many existing unit trusts might be converted into Oeics, and a fear is that one way or another, investors will foot the bill or lose out.

ON THE subject of innovation, today sees the opening of what is believed to be the UK's first seven-day bank branch, the NatWest in the Lakeside shopping centre in Thurrock, Essex.

Customers will be able to do all the usual banking things. It will be followed by a seven-day NatWest in Basingstoke from December. Over 70 more NatWest branches are also to open on Sundays just for the run-up to Christmas.

Whatever Christ may have said about moneylending and temples, there are no special laws on banks opening on Sundays, according to the NatWest. For all except the traditionalists and the real bank-haters, this has got to be good news. But the idea is equally popular among staff too. According to the NatWest, it got 300 volunteers for the 18 positions it needed to fill in Thurrock. At just time-and-a-quarter, banking staff are clearly desperate - another sign of the times.

A BOUQUET for a building society this week and a plastic daffodil for another. The bouquet goes to the Yorkshire, which from today is giving better rates to customers. The idea is to pass on more of the benefits of the society's mutual status - which means it doesn't have to pay dividends to the City - to customers, its owners. The standard variable mortgage rate is cut from 7.99 per cent (the current norm) to 7.85 per cent. Small savers also benefit.

The plastic daffodil goes to the Bradford & Bingley. This week, its chief executive announced the society was prepared to "go on to a war footing" against any hostile bid. A successful bid for the society would mean pounds 500 or so of "free" shares or cash for customers. Instead the B&B offers the prospect of a bonus scheme, to be announced in the new year, which will distribute to customers a proportion of profits it would otherwise retain.

REMEMBER, remember ... to lock doors and windows tonight. You are more likely to be burgled on Bonfire Night than at any other time of the year, apparently. And your home is six times more likely to be burgled than to catch fire, says insurer Eagle Star. That means more than 3,000 burglaries (and about 500 unplanned bonfires). Keeping firework-fearing pets inside clearly isn't much defence.